Embed Size (px)
Citation preview
Independent Expert
Evidence
Submission to the Yan Yean Road
(Stage 2) Upgrade Project Inquiry and
Advisory Committee – Environmental
Effects Statement (EES)
Instructing Party: Mr Mark Bartley & Ms Karmen Markis
HWL Ebsworth Lawyers
On Behalf Of: Jamluk Pty Ltd and the Doreen Traders and
Landowners Committee
Project: Yan Yean (Stage 2) Upgrade Project
V32278 1
1. INTRODUCTION
1.1. Instructing Party
1. Mr Mark Bartley (Partner) and;
Ms Karmen Markis (Associate)
HWL Ebsworth Lawyers
Level 26, 530 Collins Street
MELBOURNE VIC 3000
1.2. On Behalf Of:
2. Jamluk Pty Ltd and the Doreen Traders and;
Landowners Committee
1.3. Project
3. Yan Yean Road (Stage 2) Upgrade Project
1.4. Purpose of Report
4. Pursuant to our instructions from HWL Ebsworth, dated 16 November 2020 I have been instructed to
provide independent expert evidence to the Yan Yean Road (Stage 2) Upgrade Project Inquiry and Advisory
Committee EES.
5. In providing my independent expert evidence I have been specifically instructed to:
• ‘conduct and in depth review of the material supplied to you in relation to the EES;
• consider and formulate your own opinions, within the limits of your expertise, with respect to the
following matters from a land valuation perspective,
- the existing Bridge Inn Road and Yan Yean Road Intersection (Intersection) and access
arrangements to and from the Subject Land;
- the impacts on the Subject Land as a result of Design Options B and/or C for the Intersection;
and
- any other matter that you consider appropriate.
• prepare a report which sets out the conclusions which you have reached, and clearly state
the basis upon which you have arrived at those conclusions, including any facts you have
relied upon or assumption that you have made which form part of the reasoning by which
you have reached your conclusions.’
V32278 2
6. Accordingly, my statement of expert evidence focusses on the land valuation implications based on the
current access arrangements and proposed Options B and C for the intersection at Yan Yean and Bridge
Inn Roads. My statement of expert evidence further recognises the physical condition of the subject
property, Doreen Commercial Precinct and its general surrounds, as at the date of my most recent
inspection, being 19 November 2020.
7. In the interests of full disclosure, I can confirm that an initial ‘letter of advice’ was provided to Jamluk Pty
Ltd, dated 9 October 2020 in regard to this matter. The letter comprised a high level desktop review of
proposed ‘Option B’ only, and more specifically the impact on those properties under the ownership of
Jamluk Pty Ltd and not the wider Precinct. Whilst in general terms my opinion has not materially changed,
this statement of expert evidence has been produced with the benefit of the additional material which is
more particularly detailed below and has regard to the impact on the wider Precinct.
8. Information provided to assist in completing my statement of expert evidence includes, however is not
limited to the following:
1. Terms of Reference pertaining to the Yan Yean Road (Stage 2) Upgrade Project prepared by Hon
Richard Wynne MP (Minister for Planning), dated 16 August 2020.
2. Yan Yean Road Inquiry and Advisory Committee Member Biographies.
3. Direction Hearings and Timetable, dated 30 October 2020.
4. Guides to Expert Evidence and Hearings.
5. HWL Ebsworth Lawyers Submission and Map Book, dated 9 October 2020.
6. Environmental Effects Statement - Yan Yean Road (Stage 2) Upgrade Project and ancillary
documentation and miscellaneous third party submissions.
7. Major Roads Project Victoria (MRPV) Technical Notes and associated plans.
8. SIDRA Intersection Options Assessment.
9. Intersection Drawing ‘Option B’ (Discussion Purposes Only), dated 29 October 2020.
10. Memo from MRPV to Clayton Utz, dated 18 November 2020.
1.5. Code of Conduct
9. I acknowledge that I have read the Guide to Expert Evidence – April 2019 and Guide to Witnesses Providing
Evidence Through Remote Conferencing – Undated and agree to be bound by said documents.
Accordingly, I confirm that I have made all enquiries that I believe are desirable and appropriate and that
no matters of significance, which I regard as relevant have, to my knowledge, been withheld.
V32278 3
1.6. Qualifications
10. The academic qualifications of Geoffrey Brown, Director, are summarised as follows:
• Bachelor of Business (Property) – Royal Melbourne Institute of Technology.
• Advanced Certificate in Real Estate – Swinburne University of Technology.
• Fellow Member of the Australian Property Institute.
• Certified Practising Valuer.
• Member of the Real Estate Institute of Victoria.
• Licensed Estate Agent.
11. I advise that Mr Michael Mitra, Certified Practising Valuer has assisted in the preparation of the evidence
statement, however the opinions of value expressed are of Mr Geoffrey Brown, Director, Sutherland
Farrelly Pty Ltd.
V32278 4
2. SUBJECT PROPERTY
2.1. General Description
12. The Subject Land comprises the Doreen Commercial Precinct (Precinct), being a mixed use development
containing two mechanical centres, four shops and a car wash with adjoining pizza and barbers shops,
plus car detailing/dog wash premises. The subject property also includes the development of a child care
centre, medical centre and office suites, which are nearing practical completion, a McDonalds, KFC and
service station (United).
13. Under the current access arrangements, the Precinct benefits from being located at the south west corner
of the intersection of Bridge Inn and Yan Yean Roads, together with extended frontages. Accordingly, it
benefits from having excellent prominence to the high volume of vehicular traffic to both roadways and
ease of access to the development. This is considered to be the driving force behind the rental values that
are currently being achieved and the underlying land values.
14. The current occupants of the subject land and respective uses are summarised as follows:
Address Tenancy Premises
940-950 Bridge Inn Road En-Pointe Health Care Medical Suite
Captn’s Cove Fish and Chips Café / Take Away
Repco Mechanical Centre
Bridgestone Select Tyre and Auto Automotive Tyre Centre
Chicken Shop Takeaway Food
Noodle Bar Takeaway Food
United Petroleum Service Station Service Station
Smokin’ Joe’s Pizza & Grill Pizza shop
Auto Car Wash Car Wash
Ziba Barbers Barber Shop
KFC Fast Food Takeaway
20 Yellow Brick Road Butterflies Childcare & Kindergarten Child Care Centre
- Office Suites
- Medical Centre
21 Yellow Brick Road McDonalds Fast Food Takeaway
V32278 5
2.2. Precinct Plan
15. The following plans indicate the extent of the Precinct and current occupancies:
2.3. Photographs
16. Aspects of the Precinct can be seen in the following photographs:
Child Care Centre Medical Centre/Office Suites
Ref Tenant
1 En-Point Health Care
2 Captn’s Cove Fish & Chips
3 Repco
4 Bridgestone Select Tyre and Auto
5 Smokin’ Joes Pizza and Grill
6 United Petroleum Service Station
7 Auto Car Wash
8 Ziba Barbers
9 KFC
10 Child Care Centre
11 Medical & Office Suites
12 McDonalds
13 Chicken Shop
14 Noodle Bar
1 2 3
11
5
6
12
10
9
7
13
14
V32278 6
McDonalds KFC
General Aspect from Yan Yean Road General Aspect from Bridge Inn Service Road
V32278 7
3. EFFECTS OF THE PROJECT
3.1. Yan Yean Road (Stage 2) Upgrade Project Overview
17. I understand that the underlying project is being led by Major Roads Project Victoria (MRPV) and will involve
the duplication and upgrading of approximately 5.5 kilometres of Yan Yean Road between Kurrak Road
and Yarrambat and Bridge Inn Road, Doreen.
18. As detailed in the ‘Terms of Reference Inquiry and Advisory Committee: Yan Yean Road (Stage 2) Upgrade
Project’ the project is to include the following:
a) increasing the existing two lanes to four lanes (comprising two lanes in each direction);
b) two new roundabouts Heard Avenue and Youngs Road;
c) five new signalised intersections at Bannons Lane, Jorgensen Avenue, North Oatlands Road, Orchard
Road and Bridge Inn Road;
d) upgrades to the existing signalised intersections at Ironbark Road, including an additional right hand
turning lane, slip lane and traffic island;
e) new street lighting at all intersections, road signage and landscaping;
f) new 3-metre wide shared use path on the western side and 1.2 metre wide footpath on the eastern
side of Yan Yean Road; and
g) installation of continuous safety barriers running along both sides of the road and in the centre median
for protection against tree and car collisions.
19. Noting my instructions, this submission specifically concerns the proposed road alignment and
intersection options at the intersection of Yan Yean and Bridge Inn Roads. The Environmental Effects
Statement (EES) and associated documentation investigates three different options (A, B and C), with MRPV
indicating that Option B is the preferred option. I have been specifically asked to consider the implications
on the Subject Land from the Land Valuation perspective on the existing access arrangement, Option B
and Option C. In this regard I advise as follows:
V32278 8
3.2. Existing Access Arrangements
20. At present the subject property benefits from activated street frontages to Yan Yean Road and Bridge Inn
Road, with additional frontages to Activity Way, Yellow Brick Road and Mulwala Drive. This is more
particularly illustrated in the following:
21. Access to the Precinct is currently available directly off Yan Yean Road and via Activity Way, with additional
access available off Bridge Inn Road, via a Service Road. From a land valuation perspective, the central
tenets of a commercial development of this nature is prominence/exposure to the surrounding road
network (i.e. passing vehicular traffic) and ease of access. These factors are a direct consideration of the
tenants as it will impact their trading potential and in turn inform the rental that they would be prepared
to pay. Such matters also have implications on the sustainable occupancy levels that can be achieved by
the development. For this reason, the Precinct is currently entirely occupied and generally considered to
be a commercially successful development.
22. In regard to the market value of the Precinct, I have extensive knowledge and experience having been
involved in various valuation matters since its inception, together with other similar mixed use
developments in Doreen and the wider northern growth corridor. Accordingly, based on my current and
historic knowledge of the passing rental and proposed rentals of those components nearing practical
completion (child care centre and medical/office suites), I consider the Precinct to have a market value in
the order of $32,000,000 which is considered to be appropriate having regard to prevailing market
evidence.
23. The proposed Options B and C for the realignment and upgrading intersection of Bridge Inn and Yan Yean
Road will have differing implications on the land valuation of the Subject Land, in addition to the cost
implications associated with the compulsory acquisition of the additional land required.
V32278 9
3.3. Proposed ‘Option B’
24. The proposed upgrade works pursuant to ‘Option B’ will involve the duplication of the northbound and
southbound lanes to provide two lanes of traffic in each direction together with a major signalised
intersection at Bridge Inn Road, with appropriate dedicated turning lanes also provided. I also note that a
variation to ‘Option B’ has been provided incorporating a signalised intersection to Activity Way. However,
this variation does not impact the general alignment of the roadways under ‘Option B’.
25. The alignment and positioning of the roadways and intersection pursuant to Option B can be seen in the
following diagram:
Source: Yan Yean Road Environmental Effects Statement – Map Book
26. I consider that following the upgrade works the Subject Land will have significantly reduced exposure to
Yan Yean Road, noting that the revised alignment traverses a north easterly bearing, circumnavigating the
old post office and the river red gums. Exposure to Bridge Inn Road is also reduced, with the roadway
being realigned further north in this section.
27. This reduced exposure is further exacerbated by the parcels of land (‘buffer land’) between the revised
Yan Yean and Bridge Road Alignments and the exiting roadway, which could potentially be developed on
in the future. This has been highlighted on the following aerial for ease of reference:
V32278 10
28. At present ingress and egress is easily achievable to the precinct via multiple crossovers along Yan Yean
and Bridge Inn Roads. Whilst access to the precinct is still available following the works, it is considered to
be somewhat more convoluted and with access to the development being less ‘apparent’ and this is
exacerbated by the natural topography. This is more particularly illustrated by the arrows in the plan above,
which shows that the drivers line of sight will be taken away from the development and primarily focused
on the approach to major intersection, particularly with the increased volume of traffic travelling at higher
speeds. Thus, the first opportunity to fully consider how to safely access to the development and ascertain
what services are available (review signage) will be if and when the driver stops at the intersection at which
point, they will have effectively driven past the development and be located circa 75-80 metres distant
from the nearest corner of the Precinct.
29. In addition, the United Service Station, McDonalds and KFC, which also form part of the commercial
precinct and draw a significant level of trade, will also be detrimentally impacted with a potentially
significant reduction in vehicular traffic through the precinct.
30. I consider the natural and resultant implication of the above as a direct consequence of the works, will be
the loss in trade incurred by tenants of the subject who in turn may seek:
• Reduction in rental either immediately or at the next market review.
• Interim reduced rent due to reflect disturbance resulting from the construction works.
• Tenants may wish to exercise break options or not exercise further term options.
Buffer Zones
c. 75-80m
V32278 11
31. There is also the inherent risk that land comprising the buffer zone, being the land located between the
revised roadway and the Subject Land may be subject to a rezoning due to its infill nature effectively
adjoining a ‘Commercial 1 Zone (C1Z)’. Yan Yean Road would then serve as a strategic break with the
‘Rural Conservation Zone (RCZ)’ to the east. In this instance, the potential for a further small commercial
development to occur between the Subject Land and the revised Yan Yean Road alignment for have further
detrimental effects on the prominence and exposure of the development, in turn impacting its land value.
32. Examples of major road projects that have had detrimental impacts on the surrounding precinct include
the construction of the Metropolitan Ring Road, which comprises a successful showroom precinct which
enjoyed prominent exposure to high volumes of vehicular traffic along Settlement Road. Following the
project, there was a slow decline in tenancies and the precinct gradual devolved to largely factory
warehouses and secondary showroom precinct together with the inherent decline in rental and land
values. A further example is the duplication and realignment of the Calder Freeway which had a significant
on retail and service station premises on Calder Highway, Malmsbury.
33. Utilising my existing knowledge and investigations into prevailing rental values on comparable premises
both in Doreen and the surrounding suburbs, I consider that those that do not have the benefit of
prominent main frontage and/or access issues demonstrate a reduction in the achievable rental values.
This is particularly so for uses that are largely reliant on passing vehicular traffic in conjunction with ease
of access (both ingress and egress without the need for circuitous travel), such as the United Service
Station, McDonalds, KFC, Auto Car Wash and other takeaway food outlets. Thus, this will have a negative
impact on the levels of patronage and in turn the turnover and profitability of the businesses.
34. This is extremely applicable for the fast food outlets, whereby potential customers would not seek to re-
trace their route in favour of proceeding to the next more convenient option. Consequently, over time a
reduction in the rental payable occurs, while the full effects of the disruption manifests itself. We consider,
depending on the business, a reduction in the order of 10% to 20% could occur.
35. This can be particularly illustrated when comparing the passing rentals of two modern developments with
Doreen. The rents in the table below pertain to a development on the corner of Hazel Glen Drive and
Painted Hills Road, which effectively serves as Doreen’s local town centre. These roadways carry a high
volume of traffic and comprises a busy and well established retail/commercial precinct. Accordingly, the
rent in this development range from $499 to $649 per square metre of lettable. The variation in the rates
depends on the size of the unit together with its location within the development i.e. Fletchers occupy the
prominent corner unit with frontages to both Painted Hills Road and Hazel Glen Drive. A table of the rentals
can be seen below:
36.
Lot Tenant Area (m²) Current Passing
Rent (p.a.)
Rental Rate
($/m²)
1A Fletchers Doreen Pty Ltd 126.70 m² $81,900 $646
1B Thanh Tu Nguyen 103.50 m² $53,500 $517
2A Wax & Co. Clinic Pty Ltd 83.50 m² $41,000 $491
2B Lashes on Point Pty Ltd 105.20 m² $52,500 $499
Average Rent $538
V32278 12
37. Conversely, 121 Elation Boulevard comprises a modern neighbourhood retail development, known as
Riverstone Shopping Centre. It primarily serves the local surrounding residential estate and does not have
the benefit of being situated on any prominent roadways. As can be seen in the table below, the passing
rents range from $333 to $450 per square metre of lettable area. A table of the rentals can be seen below:
Shop Tenant Area (m²) Current Passing
Rent (p.a.)
Rental Rate
($/m²)
7 n/a 150 m² $50,000 $333
8 n/a 150 m² $60,000 $400
2 Kebab Culture 80 m² $32,000 $400
4 Fish and Chippery 80 m² $32,000 $400
5 Your Dentist 80 m² $36,000 $450
Average Rent $397
38. The aforementioned rental evidence indicates a clear differential in the average achievable rental value
attributable to the benefit of being situated in a prominent location and significantly more exposure to
potential patronage. Accordingly, assuming a rental reduction in the order of 10% to 20%, it will have the
following impact on the estimated market value of the Precinct:
Reduction in Rent ‘Indicative’ Market Value Loss in Market Value
10% $28,800,000 $3,200,000
15% $27,200,000 $4,800,000
20% $25,600,000 $6,400,000
* Based on estimated current market value of $32,000,000
39. The aforementioned figures do not incorporate an adjustment to the yield (multiplier). I consider that due
to the additional risk associated with the Precinct under ‘Option B’ due to increased risk of business failure,
shorter lease terms and/or increase in break options, increased incentives, sustainability of occupancy
levels etc, a softer yield may be applicable which would further devalue the Precinct resulting in a great
loss in Market Value than detailed above.
40. It is also pertinent to consider the additional costs associated with the compulsory acquisition of the
additional land in order to facilitate proposed ‘Option B’. A review of the Arcadis Drawing included in
‘Appendix A – Design Options’ pertaining to the Memo from MRPV to Clayton Utz, dated 18 November
2020, indicates that approximately 5 hectares of additional land would be required for ‘Option B’.
41. The land required to the north and east of the Subject Land is zoned either ‘General Residential Zone –
Schedule 1 (GRZ1)’, ‘Green Wedge Zone (GWZ)’ or ‘Rural Conservation Zone (RCZ)’. Surrounding land uses
include Doreen Recreation Reserve, rural residential landholdings, Doreen General Store, Homestead
Farm and Hadlow & Sons Pet Supplies and Stockfeed. Accordingly, in order to provide an indicative cost
associated with the acquisition of land pursuant to proposed ‘Option B’, I have investigated sales of relevant
transactions in the locality which are summarised as follows:
V32278 13
Address Sale Price Sale Date
Land
Area
(Ha)
Comments Analysis
109 Bannons
Lane North,
Doreen
$2,400,000
Mar-20 8.40 Zoning
‘Rural Conservation Zone – Schedule 3 (RCZ3)’
Overlays
‘Environment Significance Overlay – Schedule 1
(ESO1)’
‘Bushfire Management Overlay (BMO)’
General Comments
Comprises a rural residential landholding
improved with a substantial modern residence
incorporating four bedrooms, swimming pool,
landscaped gardens, garage and car port.
$285,714/Ha
180 Doctors
Gully Road,
Doreen
$1,615,000 Dec-18 8.62 Zoning
‘Rural Conservation Zone – Schedule 3 (RCZ3)’
Overlays
‘Environment Significance Overlay – Schedule 1
(ESO1)’
‘Bushfire Management Overlay (BMO)’
‘Heritage Overlay (HO192)’
General Comments
Comprises a rural residential landholding
improved with a historic four bedroom
Victorian Homestead, landscaped English
gardens together with ancillary agricultural
improvements.
$187,355/Ha
780 Yan Yean
Road, Doreen
$1,000,000 Oct-18 3.00 Zoning
‘Rural Conservation Zone – Schedule 3 (RCZ3)’
Overlays
‘Environment Significance Overlay – Schedule 1
(ESO1)’
General Comments
Comprises a rural residential landholding
improved by a basic three bedroom brick
veneer residence.
$333,333/Ha
150 Edward
Henty Avenue,
Doreen
$1,700,000 Oct-18 8.41 Zoning
‘Rural Conservation Zone – Schedule 3 (RCZ3)’
Overlays
‘Environment Significance Overlay – Schedule 1
(ESO1)’
General Comments
Rural residential landholding improved by a
well presented five bedroom residence,
landscaped garden and ancillary agricultural
improvements.
$202,140/Ha
V32278 14
42. My investigations indicate that the market value associated with the acquisition of land in this location to
be in the order of $250,000 to $300,000 per hectare. On this basis, the market value of the land required
pursuant to ‘Option B’ is estimated to be in the order of $3,000,000 to $4,000,000. This is considered to
be a conservative estimate and does not factor in the potentially significant costs due to increased legal
and professional fees, Severance on the residual balance of the landholdings being partially acquired and
the premium land value attached to those properties zoned “General Residential Zone (GRZ)’.
Furthermore, there may be additional costs associated with Solatium and/or Disturbance Claims
associated with any financial loss from affected business interests.
43. Whilst not specifically isolated to a land valuation matter, it is also pertinent to address ‘Appendix B –
Assessment Table’ to the ‘Memo from MRPV to Clayton Utz’, whereby ‘Option B’ is estimated to have an
overall cost of approximately $30,000,000 representing an increased cost of $10,000,000 more than
proposed ‘Option C’ (which is considered in the next section in greater detail). This is primarily due to
increased construction costs (new pavements) and land acquisition costs. As detailed in the next section,
proposed ‘Option C’ is a more cost effective and acceptable outcome for both the Subject Land and
stakeholders affected by the Project than ‘Option B’ as it is still able to achieve the objectives of the Project,
whilst including retention of the River Red Gums and Doreen General Store (Post Office), together with the
rural amenity of the general surrounds.
44. Accordingly, I consider that ‘Option B’ represents an additional financial burden to the tax payer and other
affected stakeholders noting the additional costs associated with the acquisition of the required land,
including the market value, Severance, Solatium and Disturbance. ‘Option B’ also has a considerable
negative impacts on the Subject Land, its market value and its ability to effectively serve the locality, which
is a problematic proposition as it comprises the Local Neighbourhood Activity Centre.
3.1. Proposed ‘Option C’
45. The proposed upgrade pursuant to “Option C’ more broadly follows the existing Yan Yean Road alignment
with two staggered intersections incorporated in to the design. The first intersection is located at the
existing intersection with Bridge Inn Road and the second further to the north, which links with the
realigned Doctors Gully Road.
46. The alignment and positioning of the roadways and intersection pursuant to ‘Option C’ can be seen in the
following diagram:
V32278 15
Source: Yan Yean Road Environmental Effects Statement – Map Book
47. It is noted that the access arrangements to the Subject Land remain broadly similar to the current access
provisions under proposed ‘Option C’. In addition, the Subject Land retains its exposure to Yan Yean and
Bridge Inn Roads thus representing a more appropriate outcome for the Subject Land.
48. It could be argued that vehicular traffic approaching the proposed intersection from Doctors Gully Road
is carried away from the development under this option however, Doctors Gully Road is considered to
carry significantly less vehicular traffic than Yan Yean and Bridge Inn Roads, as it primarily serves the lesser
populated townships of Hurstbridge, Nutfield and Arthurs Creek. With this in mind, I do not consider that
the market value of the subject land would be detrimentally impacted to any significant degree under
proposed ‘Option C’.
49. As detailed previously, the land required in order to facilitate the proposed ‘Option C’ is also considerably
less than Option ‘B’, therefore the cost imposition associated with the compulsory acquisition intersection
in this regard is reduced. Also, due to the utilising the existing Yan Yean Road alignment there is a
considerable reduction in the construction cost as the existing pavements can be utilised.
V32278 16
4. CONCLUSIONS
50. From a land valuation perspective, proposed ‘Option B’ is considered to have a significantly detrimental
impact of the market value of the subject land, the loss of which is estimated to be in the order of
$3,200,000 to $6,400,000.
51. The loss in market value under ‘Option B’ is effectively a product of the commercial precinct’s inability to
operate efficiently and to effectively serve the local community due to increased access issues and the
reduced exposure to Bridge Inn and Yan Yean Road. As the precinct serves as the local community’s Local
Neighbourhood Activity Centre, I consider ‘Option B’ is actually at odds with the aims and objectives of the
underlying Project.
52. The costs associated with the acquisition of the additional land required to facilitate ‘Option B’ are
conservatively considered to be in the order of $3,000,000 to $4,000,000 with potentially significant further
costs associated with legal and professional costs, Severance, Solatium, and Disturbance claims as a result
of any financial loss from affected business interests.
53. The overall delivery costs of ‘Option B’ pertaining to the construction and land acquisition are indicated to
be approximately $10,000,000 more than ‘Option C’.
54. I consider that ‘Option C’ broadly mitigates many of the shortcomings of ‘Option B’ and has a significantly
reduced impact on the market value of the Subject Land. In addition, noting that less land is required to
facilitate construction of the intersection, the delivery costs associated with land acquisition will also be
considerably less. Furthermore, I re-iterate that the ability to utilise infrastructure along the existing Yan
Yean Road alignment will reduce construction costs overwhelmingly.
55. From a Land Valuation perspective, I surmise that ‘Option B’ represents an undesirable outcome for the
Subject Land, affected Stakeholders and the broader community for whom the Project is supposed to be
for the benefit of. The additional cost in delivering the ‘Option B’ (including construction cost and land
acquisition) in addition to the loss in market value of the Subject Land and financial loss that will be incurred
by the tenants therein is not an acceptable outcome. Accordingly, I consider that either ‘Option C’, a
variation thereof or an alternative design can still achieve the aims and objectives upgrade works whilst
doing so in a more cost effective manner and mitigating the impact on the Subject Land and other affected
stakeholders.
V32278 17
SUTHERLAND FARRELLY PTY LTD
Geoffrey Brown C.E.A. (REIV)
Certified Practising Valuer F.A.P.I.
Director
Michael Mitra A.A.P.I.
Certified Practising Valuer
20 November 2020
Attachments
1. Instructing Letter
2. Initial Letter of Advice, dated 9 October 2020.
A T T A C H M E N T 1
Ins t ruct ion s
Doc ID 786134823/v1
Adelaide Brisbane Canberra Darwin Hobart Melbourne Norwest Perth Sydney ABN 37 246 549 189
Our Ref: MB: KM: 1008692
16 November 2020
Mr Geoffrey Brown
Valuations
By Email
Email: [email protected]; [email protected]
This document, including any attachments, may contain privileged and confidential information intended only for
the addressee named above. If you are not the intended recipient please notify us. Any unauthorised use,
distribution or reproduction of the content of this document is expressly forbidden.
Dear Geoffrey Letter of Instructions Yan Yean Road Duplication - Stage 2 - Environmental Effects Statement
We act for Jamluk Pty Ltd and the Doreen Traders and Landowners Committee, the owners
of land and operators of businesses generally located at 940 and 950 Bridge Inn Road and
21 and 20B Yellow Brick Road, Doreen (Clients).
Our Clients are a submitter in respect of the above proceeding which is presently listed for
hearing at 10.00am on 30 November 2020 for approximately 10 days. Our Clients are
presenting their submission to the Yan Yean Road Duplication (Stage 2) Environmental
Effects Statement (EES) Advisory Committee (Advisory Committee) on 9 December 2020.
As such, you will be required to present your expert evidence on 9 December 2020.
We enclose an electronic brief containing the most recent material in respect of this matter
for your perusal.
Instructions
Our Clients have instructed us to brief you with a view to providing independent expert
evidence to the Advisory Committee.
You are instructed to:
conduct an in depth review of the material supplied to you in relation to the EES;
consider and formulate your own opinions, within the limits of your expertise, with respect to the following matters from a land valuation perspective,
o the existing Bridge Inn Road and Yan Yean Road Intersection (Intersection) and access arrangements to and from the Subject Land;
Level 26, 530 Collins Street, Melbourne VIC 3000 Australia Telephone +61 3 8644 3500 PO Box 3, Collins Street West VIC 8007 Australia Facsimile 1300 365 323 (Australia) +61 2 8507 6582 (International) DX 564 Melbourne hwlebsworth.com.au
16 November 2020 Page 2
Doc ID 786134823/v1
o the impacts on the Subject Land as a result of design Options B and/ or C for the Intersection; and
o any other matter you consider appropriate.
prepare a report which sets out the conclusions which you have reached, and clearly state the basis upon which you have arrived at those conclusions, including any facts you have relied upon or assumption which you have made which form part of the reasoning by which you reach your conclusions.
The content, format and layout of your report, the manner of expression and the way in
which you seek to address yourself to the tasks you have been engaged to undertake are all
matters for you.
We enclose the documents Guide to Expert Evidence - April 2019 and Guide to Witnesses
Providing Evidence Through Remote Conferencing - Undated. Your report should be
prepared in compliance with these documents and the duties outlined therein.
It will be apparent to you that not all of the materials which have been forwarded to you will
be necessarily relevant to the task which you have been asked to undertake. You are
instructed to examine the material and to determine for yourself what is relevant to the
formulation of your conclusions, including any other matters you consider relevant.
If you require any further information to complete the tasks you have been instructed to
undertake, or if you require any assistance in understanding the nature of the tasks you have
been asked to undertake, please contact us.
We will serve and file the evidence to be relied upon by our Clients in this proceeding, and
such evidence must be served and filed by 10.00 am on 23 November 2020. To this end,
we require a draft statement by 19 November 2020 or earlier if possible and will require
finalised copies of your statement by no later than 4.00 pm on 22 November 2020 for
circulation.
Billing
We confirm that Jamluk Pty Ltd will be responsible for the payment of your fees.
Accordingly, please direct all accounts to Kate Campbell as follows:
Address: AGTC Property Project Management Pty Ltd - Unit 27, 1 Danaher
Drive, South Morang VIC 3752
Email: [email protected] Telephone: 9437 8966
Please do not hesitate to the undersigned if you have any queries or wish to discuss this
matter further.
16 November 2020 Page 3
Doc ID 786134823/v1
Yours faithfully
Mark Bartley
Partner
HWL Ebsworth Lawyers
+61 3 8644 3712
Karmen Markis
Associate
HWL Ebsworth Lawyers
+61 3 8644 3633
Yan Yean Road Duplication (Stage 2) Environmental Effects Statement Advisory Committee
Electronic Brief
Doc ID 786159823/v1
Letter of Instructions 1
Terms of Reference 2
Directions Letters 3
Guides to Expert Evidence 4
Submission on behalf of Jamluk Pty Ltd and the Doreen Land Owners and Traders
Committee and Map Book
5
Environmental Effects Statement (including attachments and background reports) 6
Submissions by other parties 7
Technical Material circulated by MRPV 8
A T T A C H M E N T 2
In i t ia l Let ter o f
Adv ice , dated 9
October 2020
Our ref: 202010MM08
23 November 2020
Jamluk Pty Ltd
c/o Mr Anthony Casey
Anthony Casey Real Estate Pty Ltd
AGTC Property Management Pty Ltd
Unit 27, 1 Danaher Drive
SOUTH MORANG VIC 3752
Dear Mr Casey
Re: Letter of Advice – Yan Yean Road Upgrade – Stage 2
Property: 940 Bridge Inn Road, Doreen, Victoria, 3754
We are writing in regard to advise on the potential impact that the proposed realignment of Yan Yean Road at the
intersection with Bridge Inn Road will have on the market value of the subject property, which comprises a mixed
use development containing two mechanical centres, two shops and a car wash with adjoining pizza and barbers
shops, plus car detailing/dog wash premises. The subject property also includes the development of a child care
centre, medical centre and office suites which are nearing practical completion, and also form part of the overall
commercial precinct, which includes a McDonalds, KFC and service station (United).
At present the commercial precinct benefits from being located at the south west corner of the intersection of
Bridge Inn and Yan Yean Roads, together with extended frontages. Accordingly, it benefits from having excellent
prominence to the high volume of vehicular traffic to both roadways and ease of access to the development. This
is considered to be the driving force behind the rental values that are currently being achieved and the underlying
land values.
The proposed upgrade works in this section will involve the duplication of the northbound and southbound lanes
to provide two lanes of traffic in each direction together with a major signalised intersection at Bridge Inn Road,
with appropriate dedicated turning lanes also provided for. The proposed intersection can be more particularly
seen in the following diagram:
2
The aerial images below further illustrate the situation before and after the upgrade works:
We consider that following the upgrade works the commercial precinct in general (dashed yellow in aerials above)
will have a significantly reduced exposure to Yan Yean Road, noting that the revised alignment traverses a north
easterly bearing, circumnavigating the old post office and the river red gums. Exposure to Bridge Inn Road is also
reduced, with the roadway being realigned further north in this section.
This reduced exposure is further exacerbated by the parcels of land (‘buffer land’) between the revised Yan Yean
and Bridge Road Alignments and the exiting roadway, which could potentially be developed on in the future. This
has been highlighted on the aerial above for ease of reference.
At present ingress and egress is easily achievable to the precinct via multiple crossovers along Yan Yean and Bridge
Inn Roads. Whilst access to the precinct is still available following the works, it is considered to be somewhat more
convoluted and with access to the development being less ‘apparent’. Therefore, potential customers are less likely
to enter the precinct, particularly noting high volume of traffic travelling at higher speeds.
In addition, the Service Station (United), McDonalds and KFC, which also form part of the commercial precinct and
draw a significant level of trade, will also be detrimentally impacted with a potentially significant reduction in
vehicular traffic through the precinct.
The natural and resultant implication of the above as a direct consequence of the works, will be the loss in trade
incurred by tenants of the subject who in turn may seek:
• Reduction in rental either immediately or at the next market review.
• Interim reduced rent due to reflect disturbance resulting from the construction works.
• Tenants may wish to exercise break options or not exercise further term options.
‘Buffer Land’
3
In providing an indicative view on the potential impact on the market value of the subject property, we have firstly
provided a summary on the current passing rentals being achieved by the development and in turn an assessment
on its market value (indicative purposes only) as follows:
Tenancy Premises Annual Passing
Rental
Podiatry & Osteopath Medical Suite $46,340.00
Fish & Chip Shop Café / Take Away $36,059.00
Repco Mechanical Centre $77,610.25
Bridgestone Automotive Tyre Centre $80,000.00
Smokin’ Joe’s Pizza & Grill Pizza shop $26,522.50
Owner occupied Car Wash $65,000.00¹
Ziba Barbers Barber Shop $15,450.00
Butterflies Childcare & Kindergarten Child Care Centre $300,000.00
- Office Suites $152,000.00¹
- Medical Centre $60,000.00¹
Total Rent Roll $733,981.75
‘Indicative’ Market Value (Blended Yield of 5.92%), SAY $12,400,000
* Assessed Rentals
We have utilised the aforementioned table to prepare a sensitivity analysis which indicates the impact on the
market value of the development depending on the extent of reduction in the overall rent roll (between 5% and
20%) as result of the realignment of Yan Yean and Bridge Inn Roads.
The sensitivity analysis is as follows:
Reduction in Rent ‘Indicative’ Market Value Loss in Market Value
5% $11,780,000 $620,000
10% $11,160,000 $1,240,000
15% $10,540,000 $1,860,000
20% $9,920,000 $2,480,000
We also consider that the value of the businesses within the premises will be affected plus the value of the fast
food outlets (McDonalds & KFC) and the service station (United).
We further consider that the proposed alignment will result in an additional financial burden to the tax payer
associated with the acquisition of the additional land required and resultant compensation claims pursuant to the
provisions of the ‘Land Acquisition and Compensation Act 1986’ . Compensation includes the market value of the
land taken, severance, solatium and disturbance (where applicable).
4
Our investigations indicate that the market value associated with the acquisition of ‘Rural Conservation Zone (RCZ)’
land in this location to be in the order of $250,000 to $300,000 per hectare, as detailed in the following sales
evidence:
Address Sale Price Sale Date
Land
Area
(Ha)
Comments Analysis
109 Bannons
Lane North,
Doreen
$2,400,000
Mar-20 8.40 Zoning
‘Rural Conservation Zone – Schedule 3 (RCZ3)’
Overlays
‘Environment Significance Overlay – Schedule 1 (ESO1)’
‘Bushfire Management Overlay (BMO)’
General Comments
Comprises a rural residential landholding improved with
a substantial modern residence incorporating four
bedrooms, swimming pool, landscaped gardens, garage
and car port.
$285,714/Ha
180 Doctors
Gully Road,
Doreen
$1,615,000 Dec-18 8.62 Zoning
‘Rural Conservation Zone – Schedule 3 (RCZ3)’
Overlays
‘Environment Significance Overlay – Schedule 1 (ESO1)’
‘Bushfire Management Overlay (BMO)’
‘Heritage Overlay (HO192)’
General Comments
Comprises a rural residential landholding improved with
a historic four bedroom Victorian Homestead,
landscaped English gardens together with ancillary
agricultural improvements.
$187,355/Ha
780 Yan Yean
Road, Doreen
$1,000,000 Oct-18 3.00 Zoning
‘Rural Conservation Zone – Schedule 3 (RCZ3)’
Overlays
‘Environment Significance Overlay – Schedule 1 (ESO1)’
General Comments
Comprises a rural residential landholding improved by a
basic three bedroom brick veneer residence.
$333,333/Ha
150 Edward
Henty Avenue,
Doreen
$1,700,000 Oct-18 8.41 Zoning
‘Rural Conservation Zone – Schedule 3 (RCZ3)’
Overlays
‘Environment Significance Overlay – Schedule 1 (ESO1)’
General Comments
Rural residential landholding improved by a well
presented five bedroom residence, landscaped garden
and ancillary agricultural improvements.
$202,140/Ha
5
This letter of advice has been prepared for ‘indicative’ purposes only and the information contained herein should
only be utilised for discussion purposes only.
We trust this the contents of the letter is self-explanatory, however if you have any queries, please do not hesitate
to contact the writers.
Yours faithfully
SUTHERLAND FARRELLY PTY LTD
Geoffrey Brown C.E.A. (REIV)
Certified Practising Valuer F.A.P.I.
Director
Michael Mitra A.A.P.I
Certified Practising Valuer
